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eBay Seeking Data Center in Southwest

The giant auction service eBay is looking for a site for a new data center, and is said to be focusing its search on the Southwest, including sites in Phoenix, Arizona and Utah. The facility, which could be as large as 250,000 square feet, would continue a regional expansion that has seen eBay (EBAY) acquire a large data center in Phoenix and expand its facility in Denver. The company is believed to have six data centers, including facilities in San Jose, Sacramento and Austin, Texas.

eBay has 276 million registered users worldwide, and its web site serves up 1 billion page views and 26 billion SQL queries every day. It takes industrial-strength infrastructure to support that much traffic. But eBay has plenty of cash for expansion, as it has accumulated a war chest of about $5 billion in cash and short-term investments on its balance sheet.

eBay last expanded its network in 2006, when it bought the former Switch-X data center in Phoenix for $16.3 million. The company cited the location's low exposure to natural disasters as an important factor in its selection of the 135,000 square foot building.

Utah is not known for housing huge data centers, but has become home to a growing number of web hosts and enterprise data centers, including facilities for Center 7, ViaWest, WestHost and TierFour (UVNet) are among the companies that have built or acquired data centers in Utah in the past several years. A 2007 study by the Kauffman Foundation found that Utah led the nation in "economic dynamism" based on a strong concentration of fast-growing technology startups.

The company's focus on the Southwest is a function of its network requirements, according to InformationWeek. Too much distance between the eBay data centers would lead to latency, which is problematic due to the database-intensive nature of eBay's site.